Selling your business (Part 2)
__Know your strengths, and where you want to go.
“So why do you want to sell this business?” I asked, after reading the financial statements. “This is a sound business; it’s profitable and growing nicely. Are you distressed by something?”
“No, I’m happy and I don’t need the money. I just don’t feel I can take the business to the next level,” he replied confidently.
“We need a lot of money to scale, and meet the growing demands of the business. My partners and I just don’t have the capacity to do that. We want to sell.”
This was not a distressed business and this was not a distressed seller. He was smart, very smart. This type of seller is very tough to negotiate with and usually gets out at a premium. They’re usually very well advised by smart bankers and lawyers, too!
I’ve been in this position myself and when I did it well, I made a “ton of money”! It’s like when Tottenham sold Gareth Bale to Real Madrid. This happens in business when you have a hot little business that the big boys need. Besides the howls of protests in public, they were rubbing their hands in the board room with total glee! I know if you’re a fan of Tottenham, you might not have liked it, but £86m for a young player… go for it!
In business we’re always doing the same.
I remember one time with a business we were developing, I needed hundreds of millions of dollars to take it to the next level. This meant investors would make us minority owners. I opted to sell and take my money elsewhere, even though I knew it would be big one day.
No regrets… Remember the guy who sells “day-old chicks”? This was me on that one!
Now if you’ve finally decided to sell YOUR business (whether a one-person shop or a global giant) let’s talk about a few key things you should be thinking about:
__“Is the time ripe to sell?”
If it’s not a “distressed” sale, this can be difficult to answer: Sell now? Or later?  Especially if a potential buyer isn’t yet knocking at your door, external market factors like interest rates, input prices, new competitors or innovations, income tax issues, regulatory changes, economic forecasts, etc. all could impact your decision. As always, do your homework and consult experts when necessary.
Like I wrote a few weeks ago, don’t procrastinate when facts are obvious, but also don’t allow yourself to be pressurized into making a hasty decision… especially not before asking and answering the all-important question:
__“What is my business really worth?”
Appraising the market value of businesses is also a business, and can be complicated. To help you price your company correctly (depending on its size) try to hire the best professional valuation expert you can afford. You might “believe” your business is worth X, partially based on emotion, but you could be very wrong – either on the high side or the low side.
__Pay attention because you may have never been this way before…
# Be ready to answer lots of questions (with facts and data) and always remember — honesty is the best policy. No one expects to be buying a perfect business! 
# Make sure your financial records (and all your legal documents) are in order. Most buyers want to see (and verify) revenues and profits. If you can, have available at least three years of financial information. Audited statements are best.
Whatever you do, don’t get excitable and sell yourself (or your business) short… Your professionalism and confidence can make all the difference between a win-win business deal and daylight robbery.
To be continued. . .